Role of Wholesalers In The Indian Market

A Hustler, a point of contact between the end consumers/retailers and the manufacturers, an entity with full-fledged user information and buyer’s persona, any guesses which superhero is being talked about here? Well, Wikipedia calls him a wholesaler.

According to Google:

Wholesalers are those middlemen in the channel of distribution who deal with goods in bulk quantity. They sell goods to retailers and in some cases directly to consumers.

According to export.gov, both the redistribution stockists and wholesalers will service between 250,000-750,000 retailers throughout the country in the coming years.

Wholesaling is an important aspect of distribution because of the impact it has on the economy, its functions in the distribution channel and its relationship with suppliers and customers. A year in a wholesaler’s life is all about buying and assembling goods from different producers, selling and dispersing the goods to the retailers, storing the bulk quality in warehouses, packing and grading of the products before dispatching, financing and risk-bearing for the bulk goods.

With all this, Wholesalers are surely the superhero of any market setup. To understand the intricate role of a wholesaler, let us dive into the services that they offer to both producers (sellers) and retailers (buyers).

Services to the Producers:

Buyer and Market Analysis:

Being in constant touch with the buyer side, wholesalers have an approximate idea of how much quantities of a particular good can be sold in a specific geography/market.

Transportation and Storage Facilities:

Neither producers nor retailers have to worry about the dispatch and transportation of the goods to the final destination. Also, if the good are procured in large quantities by the wholesaler, the burden of storing those goods lies on the wholesaler and no other party involved in the chain.

Price Players:

Wholesalers play a crucial role in the fixation of the final prices of the goods making both producers and retailers fall on their equilibrium points.

Services to the Retailers:

User Manual and Promotion Guide:

The wholesalers become the user manual for the retailers and inform them about the new products,  their uses and changes in their prices.They also help the retailers with promotion and advertising to get better sales for their stocks.

Financial Support and Risk Bearing:

The wholesaler provides financial support to the retailers by selling goods on credit to retailers and thus help them to operate with small working capital. They also bear the risk of loss arising which may arise from holding large stocks/quantities of goods.

Grading and Sorting:

The wholesalers may also sort out different grades of products which are required by the retailer. After procuring different goods from numerous producers, grading and sorting them, the wholesalers pack the goods into small lots for their retailers.

At the End

Wholesalers and wholesale markets play a crucial role in a distribution chain. The wholesale markets in India are a hub for affordable picks for the retailers. Some of the examples of wholesale markets in India are Chawri Bazaar, Chandani Chownk, Sadar Bazaar, etc. which have made the process of buying and selling easy for all the entities involved in the market setup.

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